White House adviser slams S&P after U.S. downgrade

By IBT Staff Reporter On 08/06/11 AT 9:48 PM

A top White House economic adviser slammed Standard & Poor's on Saturday for having stuck with its decision to downgrade the U.S. credit rating despite having made a $2 trillion mistake in its fiscal projections.

The magnitude of their error combined with their willingness to simply change on the spot their lead rationale in the press release once the error was pointed out was breathtaking, National Economic Council head Gene Sperling said in a statement.

It smacked of an institution starting with a conclusion and shaping any arguments to fit it, he said.

S&P, a major credit rating agency, cut the long-term U.S. credit rating by one notch from AAA to AA-plus on Friday on concerns about the government's budget and rising debt burden.

The U.S. Treasury said the rating agency's debt calculations were wrong by some $2 trillion. S&P has confirmed it changed its economic assumptions after discussion with the Treasury Department but said that did not affect its decision to downgrade.

A major theme in S&P's analysis was the apparent breakdown in the ability of Republicans and President Barack Obama's Democrats to govern effectively, as evidenced in the fractious negotiations leading to a last-minute debt limit deal that brought the United States to the edge of default.